The SAND – A Simple Agreement for Non-Dilutive Capital

Forget Dilution. Welcome to the Age of Revenue-Responsive Capital: Introducing Revtap's SAND

It’s been over a decade since Y Combinator introduced the SAFE (Simple Agreement for Future Equity), revolutionizing startup financing by eliminating the complexities of equity financing. Since then, the SAFE has had a profound impact on the financing landscape, becoming a staple for countless startups due to its simplicity and founder-friendly terms. Today, a significant portion of early-stage investments utilize the SAFE.

But while the SAFE simplified equity financing, it didn’t address the founder’s equity dilution dilemma – balancing growth without losing control. Inspired by the innovation the SAFE provides, Revtap aims to solve this with the SAND – Simple Agreement for Non-Dilutive Capital, offering founders a non-dilutive financing solution offering investors the ability to share in a company’s growth without equity.

SAND – A Simple Agreement for Non-Dilutive Capital​

Unlike a SAFE where investors receive future equity in the company (and no guarantee of any return on that equity), SAND delivers immediate, ongoing, growth-linked returns. The ability to “own” a share of the top line revenues in fast growing, early stage tech companies. 

And for these companies, there are no fixed interest payments, similar to interest-only loans, making it easier to manage cash flow. They can also choose to end the agreement at any time by repaying the principal. This often coincides with a new funding round or liquidity event.

The Details - Why We Call It Simple

SAND is essentially a financing agreement where startups receive funding in exchange for a share of revenues, rather than equity or interest. Think of it as a performance-based partnership, where investors win when the company wins.

Here’s how it works.

  1. Revtap provides capital of up to 25% of Annual Recurring Revenue in the form of a loan
  2. Rather than interest and principal repayments over a fixed term, the company simply pays 1-2% share of gross revenues
  3. At anytime, the company can repay all, or part of the loan without penalty, ending or reducing the revenue share terms

Benefits for Companies

  • Founders Maintain Control: You keep 100% ownership of your company. Your vision, roadmap, and decision-making remain yours.
  • Flexible Capital: Revtap offers SAND in various structures to cater to your specific needs, whether you’re a later-stage company with steady revenue streams or a high-growth, early-stage venture.
  • Revenue Share, Not Debt: Instead of fixed interest payments, revenue sharing aligns the cost of capital with your financial performance. Low revenue months mean lower payments, allowing you to focus on growth.
  • Transparent Terms: The SAND agreement is clear and concise, outlining the revenue share percentage, repayment terms, and other relevant details.
  • Fast and Efficient Funding: The streamlined SAND application process gets you the capital you need quickly, so you can focus on what matters most – building your business.

Benefits for Investors

  • Immediate Returns: Start earning from the company’s revenue stream from day one.
  • Reduced Risk: The revenue-sharing model mitigates downside risk compared to traditional equity investments.
  • High-Growth Potential: Invest in promising startups with the potential for significant returns.
  • Alignment with Success: Your returns are directly tied to the company’s performance, incentivizing strong growth.

Ready to Reimagine Startup Funding?

The SAND is a game-changer for founders and investors alike. It offers a win-win scenario, fostering a collaborative environment where everyone benefits from the company’s success.

Revtap is actively seeking innovative companies to partner with through the SAND program. If you’re a founder looking for capital without sacrificing control, or an investor seeking high-growth opportunities with reduced risk, we invite you to learn more about SAND.

Contact us today to explore how Revtap’s revolutionary funding solutions can empower your business to reach its full potential.

Read the SAND Term Sheet

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